Symrise has continued its growth course in the first half of 2022. The company saw a strong increase in sales and profit. Organic sales growth came to 10.2%. Taking portfolio and exchange rate effects into account, sales in the reporting currency increased by 18.5% to €2,260m.
At €229m, net income for the first six months exceeded the previous year’s figure of €196m by 16.6%. In light of its performance in the first half of the year, Symrise is raising its forecast for the year as a whole and is now targeting organic sales growth of significantly above 7%.
“In a volatile business environment caused by rising commodity prices, ongoing global supply bottlenecks and the Russia-Ukraine war, we managed to continue on our profitable growth course. We achieved this by relying on our robust business model, diversified application portfolio and broad regional presence and customer base. Demand increased significantly in many areas. Customers have particularly increased their demand for applications for cosmetics, fine fragrances and pet food. Solutions for beverages and food have also performed very well and considerably contributed to the double-digit organic growth,” said Dr Heinz-Jürgen Bertram, CEO of Symrise. “In light of the dynamic business development, we have raised our sales forecast and are now targeting organic sales growth of significantly above 7% for the current fiscal year. While commodity and energy prices continue to increase, we want to maintain profitability at a high level with an EBITDA margin of around 21%.”
Growth in the group
Symrise achieved sales growth of 18.5% in the first half of 2022. The acquisition of the fragrance and aroma chemicals business of Sensient, the acquisitions of Giraffe, Schaffelaarbos, Groupe Néroli and Romani, and the sale of the Velcorin and colour business exerted a positive impact on sales development totalling €59m. Excluding portfolio and exchange rate effects, organic sales growth amounted to 10.2%.
Taste, nutrition and health segment
Taste, nutrition and health achieved organic sales growth of 12.7% in the first half of 2022.
In the food and beverage division, increased leisure activities and growing out-of-home consumption led to good demand for beverage and savoury products. It recorded the strongest growth rates in the Latin America, Asia/Pacific and EAME (Europe, Africa, Middle East) regions. The sweet business in the Latin America region reported high double-digit percentage growth. The naturals business unit strongly expanded its sales, particularly in North America.
Operating result and net profit
The consequences of the coronavirus pandemic and the war in Ukraine have impacted the business development of Symrise to a minor degree. The disruption of supply chains and the availability of raw materials have exerted a noticeable impact on the procurement markets and have led to price increases for raw materials, some of which at a significant level. The sharp rise in inflation in recent months has led to further cost increases at Symrise. The company is countering this development by consistently increasing prices for its own customers.
In the first six months of 2022, Symrise generated earnings before interest, taxes, depreciation and amortization (EBITDA) of €486m. Compared to the same period of the previous year, this constitutes an increase of 15.7%, driven by both profitable sales growth and the portfolio effects. At 21.5%, the EBITDA margin fell 0.5% below the same period of the previous year, mainly as a result of increased raw material costs and higher operating costs. Earnings before interest and taxes (EBIT) increased by 16.0%, from €297m to €344m.
The consolidated net income for the period attributable to shareholders of Symrise for the first six months of 2022 amounted to €229m, which was €33m higher than the amount of the previous year, €196m. Earnings per share rose by 13% to €1.64, up from €1.45 in the first half of the previous year.
Forecast raised for the 2022 fiscal year
With the current volatile market environment as a result of the Russia-Ukraine war, rising raw material prices and ongoing global supply bottlenecks, Symrise considers itself well positioned to continue on its profitable growth path. The company relies on its robust business model, diversified application portfolio and broad regional presence and customer base.
Symrise has thus reaffirmed its growth and profitability targets and continues to expect to grow faster than the relevant market. The company is targeting organic sales growth of significantly above 7% in 2022.
Symrise is focusing on organic as well as inorganic growth, including the acquisitions of the Canadian company Giraffe in December 2021, the Dutch company Schaffelaarbos in January 2022, French companies Groupe Néroli and Romani in April 2022, and the Chinese company Wing Pet Food in July 2022. Moreover, Symrise will maintain its cost awareness and pursue holistic sustainability management in all areas of the company.
In the medium term, the company aims to increase its sales to €5.5-6bn by 2025. Annual growth of 5-7% (CAGR) as well as targeted acquisitions are expected to contribute to this.
